Flipkart's co-founder & group CEO, Binny Bansal has stepped down from the company with immediate effect, following a probe into serious personal misconduct, Walmart said on Tuesday. Bansal has separately confirmed the development to ET.This move comes less than six months after Walmart acquired a majority ownership in the web retailer.
In an email to Flipkart employees, Bansal said these allegations has left him stunned and strongly denies them.
“For some time, I have been mulling over the right time to step away from an operating role at Flipkart Group. My plan was to continue in my current role for a few more quarters to continue the transition after closing the deal with Walmart. However, my decision to step down has been accelerated by certain personal events that have taken place in the recent past,” he said.
Bansal noted that the allegations were uncorroborated after a thorough investigation completed by an independent law firm.
"The investigation, however, did bring to light lapses in judgment, particularly a lack of transparency, related to how I responded to the situation. These have been challenging times for my family and me. I am concerned that this may become a distraction for the company and the team. In light of these circumstances, I feel it is best to step away as chairman and group CEO,” he said in the email.
Bansal had previously stayed on at Flipkart with his other co-founder Sachin Bansal leaving the company at the time of the sale. Binny Bansal said he will continue to remain a large shareholder and a member of the Flipkart board.
Both the Bansals held around 5-6% each in Flipkart, with Sachin having sold his entire holding as part of the Walmart acquisition.
Binny's exit from Flipkart had been speculated at the time the Walmart deal was being struck but he was held back at the time.
In a separate email, chief executive Kalyan Krishnamurthy assured employees that there will be no changes in the company's operating processes, or to the mission of the company as a result of this news.
"We know what Binny has meant to the company as co-founder. But Flipkart along with Group Companies Myntra, Jabong, and PhonePe - as leaders in their respective spaces - are today stronger than ever before to continue on their growth journey and expand the market. I take seriously the responsibility of leading our teams at Flipkart, Myntra and Jabong, and am looking forward to working with all of you." Krishnamurthy said in the email.
Krishnamurthy added "I am very confident in the ability of the Flipkart, Myntra and Jabong teams to keep guiding us to greater successes. Flipkart will continue to invest heavily in supply chain, innovation & technology, with a focus on optimizing operations, and empowering you all to deliver an exceptional customer experience. Our board remains committed to investing for the long term and supportive of the leadership team’s desire to evolve into a publicly-traded company in the future."
Here's the full statement from Flipkart and Walmart on Binny Bansal's exit
Binny has been an important part of Flipkart since co-founding the company, but recent events risked becoming a distraction and Binny has made a decision to step down.
His decision follows an independent investigation done on behalf of Flipkart and Walmart into an allegation of serious personal misconduct. He strongly denies the allegation. Nevertheless, we had a responsibility to ensure the investigation was deliberate and thorough.
While the investigation did not find evidence to corroborate the complainant’s assertions against Binny, it did reveal other lapses in judgement, particularly a lack of transparency, related to how Binny responded to the situation. Because of this, we have accepted his decision to resign.
Binny has been contemplating a transition for some time and we have been working together on a succession plan, which has now been accelerated. Going forward, Kalyan Krishnamurthy will continue to be CEO of Flipkart, which will now include Myntra and Jabong, continuing to operate as separate platforms within the Flipkart business. Ananth Narayanan will continue providing great leadership as CEO of Myntra and Jabong, and will report into Kalyan. Sameer Nigam will continue leading PhonePe as CEO. Both Kalyan and Sameer will report directly into the board.
As we look ahead, we have full confidence in the strength and depth of leadership across the company. We remain committed to investing for the long-term and are supportive of the leadership team’s desire to evolve into a publicly-traded company in the future.
Developing story. More updates to follow